Tourism & Hospitality Industry in India

Introduction

Today, tourism is the most vibrant tertiary sector and has a strong hold on the economy. The sector contributes 6.23 per cent to the national gross domestic product (GDP) and 8.78 per cent of the total employment in India. Moreover, India stands 42nd in the world rankings in terms of foreign tourist arrivals (FTAs) in the country, as per a report titled 'Competitiveness of Tourism Sector in India with Selected Other Countries of the World' by Ministry of Tourism. The World Travel and Tourism Council (WTTC) named India along with China as one of the fastest growing tourism industries for the next 10 to 15 years, added the report.

In addition, the Union Ministry of Tourism will organise an International Tourism Mart at Guwahati from January 18 to 20, 2013. This will not only be the first ever International Tourism event to be organised in the north-eastern region, but also the first International Tourism Mart to focus on a specific region of India, said Mr K Chiranjeevi, the Union Tourism Minister. He further added, "It will bring together the tourism business fraternity and entrepreneurs from the eight north eastern states of India and West Bengal. The event has been planned and scheduled to facilitate interaction between buyers, sellers, media, Government agencies and others."

"The demand for five-star hotels in the Indian market has been robust and we are delighted to have initiated the first phase of our expansion into India with this landmark project in Mumbai," said Mr Gerald Lawless, President and Group CEO of Jumeirah Group.

Market Size

The amount of foreign direct investments (FDI) inflow into the hotel and tourism sector during April 2000 to October 2012 was worth US$ 6,484 million, as per data provided by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce.

Foreign Exchange Earnings (FEEs) from Tourism showed an increase of 21.8 per cent during 2012, as compared to FEEs of 2011. FTAs in India during 2012 were 6.65 million with a growth of 5.4 per cent as compared to the FTAs of 6.31 million during the year 2011.

FEEs from tourism in rupee terms during 2012 were Rs 94,487 crore (US$ 17.27 billion) with a growth of 21.8 per cent as compared to the FEEs of Rs 77,591 crore (US$ 14.18 billion) during the year 2011.

Visa on Arrival (VoA) scheme of India registered an increase of 26 per cent in 2012. A total number of 16,084 VoAs were issued during 2012 as compared to 12,761 VoAs issued during 2011.

Investments

India plans to strengthen the engagement with Vietnam both bilaterally and within the framework of ASEAN. We have set a target of US$ 100 billion for India-ASEAN trade by 2015, as per Mr K Chiranjeevi, Union Minister for Tourism, Government of India

The number of Indians visiting Vienna, known to be the city with the world's best quality of living, has doubled over the last six years, with an estimated 25,000 Indian tourists, according to Vienna Tourist Board, Austria

India and Australia are important tourism markets for each other. Australia is one of top 10 tourist generating markets for India as far as inbound tourism is concerned. Mr Martin Ferguson, the Australian Energy, Resources and Tourism Minister during his discussion with Mr K Chiranjeevi, the Union Tourism Minister, Government of India, has called for direct air connectivity between India and Australia to boost tourism

Kerala has emerged as number one travel destination in Google's search trends for India in 2012. "Kerala Tourism is a leader in online promotional activities of the State as a tourist destination," said Mr A P Anil Kumar, Minister for Tourism, Kerala

Jumeirah Group, the global hospitality company and a member of Dubai Holding, has entered India with its maiden management agreement to operate a luxury hotel at Lower Parel in central Mumbai

European hotel operator Accor is planning to buy another property in Ahmedabad. The Group, which has 19 hotels with 3,780 rooms and two convention centers in India, is looking at three or four more locations within Gujarat to set up the Accor range of hotels, according to Mr Philip Logan, Vice-President Formule1 Hotels, India

MakeMyTrip India Pvt Ltd has acquired the Hotel Travel Group (HT Group) for US$ 25 million. "The acquisition will help to build a stronger presence in the South-East Asia region," said Mr Deep Kalra, Founder and Chief Executive Officer (CEO), MakeMyTrip.com

Government Initiatives

The Ministry of Tourism, Government of India has consistently been working on improving India as a prime destination for tourists. It further aims at promoting various Indian tourism products vis-à-vis competition faced from various destinations and to increase India's share of the global tourism market.

The Government of India allows 100 per cent foreign direct investment (FDI) in the hotel sector on automated basis.

As a facilitative measure to attract more foreign tourists to India, the Government launched the "Visa on Arrival" (VoA) Scheme in January 2010 for citizens of five countries, viz. Finland, Japan, Luxembourg, New Zealand and Singapore, visiting India for tourism purposes. The Government extended this Scheme to the citizens of six more countries, namely Cambodia, Indonesia, Vietnam, the Philippines, Laos and Myanmar in January 2011.

The Ministry of Tourism has also announced the setting up of the Southern Zonal Tourism Council (SZTC) comprising the States of Andhra Pradesh, Kerala, Karnataka, Tamil Nadu and the Union Territory of Puducherry. The Minister in his interaction with the office bearers of World Travel & Tourism Council - India Initiative (WTTCII) welcomed the idea. "The setting up of the Southern Zonal Tourism Council will help facilitate development of tourism and tourism products of Southern India in a holistic and comprehensive manner. Development of Integrated Tourism Circuits among the Southern states will be the way forward.

Road Ahead

The Ministry of Tourism has also played an important role in the development of the industry, initiating advertising campaigns such as the 'Incredible India' campaign, which promoted India's culture and tourist attractions in a fresh and memorable way. The Indian tourism industry has been witnessing an upswing for last few years partially due to an excellent 'Incredible India' campaign and is expected to increase up to US$ 431.7 billion by the end of 2020.

Cruise shipping is one of the most dynamic and fastest growing components of the global leisure industry. India with a vast and beautiful coastline, virgin forests, and undisturbed idyllic islands can be a fabulous tourist destination for cruise tourists.

On the other front, India has potential to develop the rural tourism industry. This can benefit the local community economically and socially, and enable interaction between tourists and locals for a mutually enriching experience.

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